From the Wall Street Journal:

Investors agreed to pay the German government for the privilege of lending it money.

In an auction Monday, Germany sold €3.9 billion ($4.96 billion) of six-month bills that had an average yield of negative 0.0122%, the first time on record that yields at a German debt auction moved into negative territory.

This means that unlike most other short-term sovereign debt, in which investors expect to be repaid more than they lend, investors agreed to be paid slightly less. And they are willing to do that because they are so worried about the potential for big losses elsewhere.

The so-called safety of government paper is being eroded by the reality of negative real rates.

The same conundrum applies to America.

In theory, this is designed to try and force fearful investors into more productive assets.

But in reality the irresistible force of the printing press slams up against the immovable object of depressed demand. They have shoved and shoved and shoved this huge boulder, but the market hasn’t budged…